Tech View: Nifty forms shooting star candle. What Traders Should Do on Tuesday

On Monday, Nifty fell 247 points, forming a shooting star candle on the daily chart and violating the important support of the 20-day EMA located at 22,370.

Larger-scale positive chart patterns, such as higher highs and lows, remain intact on the weekly chart, and current weakness could coincide with the formation of new higher lows in the pattern. However, a reversal from the low to the higher low is not yet confirmed.

Nifty is currently nearing the weekly 10-period EMA around 22,200 levels. Moving averages have been supporting the market for the past few months, said Nagaraj Shetti, senior technical research analyst at HDFC Securities.

The daily momentum indicator has triggered a new negative crossover, which is a sell signal.

What should traders do? Analysts said:

Jatin Gedia, Sharekhan

On the daily chart, we can see that Nifty is in the process of reversing the gains witnessed from 22,710 – 22,776. The key 50% and 61.82% Fibonacci retracement levels are located at 22,240 – 22,117. Therefore, if it rebounds from 22,350 to 22,370, it should be used as a selling opportunity. On the other hand, the gap zone in the 22,420-22,500 range formed on Monday will act as an immediate hurdle from a short-term perspective.

Tejas Shah, Technology Research, JM Financial & BlinkX

Nifty closed below the important support level of 22,500 during Monday’s trading session, which is not a healthy sign. Technically, breaking above 22,500 as a close on the daily chart with volume and strong momentum weakened the setup and should be noted. The 22,250 level is the immediate support to watch out for in Nifty, and the larger area of ​​support is 22,000-100. On the higher side, Nifty’s immediate resistance is 22,350 level and the next important resistance is 22,500 mark. Overall, Nifty is likely to remain volatile within the 22,000-22,500 range in the near term with a negative bias.

Rupak De, LKP Securities

Nifty recently fell below important moving averages due to a consolidation breakdown. Additionally, the Relative Strength Index (RSI) indicates a bearish crossover. Near-term sentiment appears bearish, but a significant decline is not expected at the moment. Instead, the index is likely to fluctuate between 22200 and 22400. Sellers are expected to remain present as long as the index remains below the 22400 mark. (Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own. They represent the views of The Economic Times)